Fee Delay Costs City $2.3 Million

June 2, 1986|By Geri Throne and Goldie Blumenstyk of The Sentinel Staff

Orlando has lost out on at least $2.3 million it could have collected from developers for new road projects in the five months it has repeatedly delayed adoption of a transportation impact fee.

Unless the city adopts its fee by the end of the summer, the city may lose out on up to $2.8 million more. Developers of several giant downtown projects -- including Sun Bank Center and the new Church Street Station hotel and marketplace -- will have started construction by then and will be exempt from the fees.

The estimated loss is based on an Orlando Sentinel analysis of new city construction since January, using Orange County impact fee rates.

Orlando officials earlier had said they would adopt a fee similar to Orange County's at about the same time. They say the fee probably will be adopted in mid-August and will include lower rates for downtown because more people walk than drive once they get downtown.

Orange approved its fee in December and has collected about $2.8 million since Jan. 1.

The money is used to widen and improve roads needed for traffic from new development.

The biggest project that may benefit from the delay is Bob Snow's Church Street Station Festival Market, the downtown shopping center and restaurant that will adjoin Snow's existing entertainment complex.

The 110,000-square-foot project is expected to have its building permits in June, according to an architect familiar with it. That would exempt it from impact fees.

A developer would have to pay about $435,000 to build a project that size in unincorporated Orange County.

In January, Orlando officials promised their impact fee would be ready for adoption in February. But in February, staffers said it would be ready at a later date.

In April, the fees were promised for consideration in May. But the hearing was delayed again before the May Municipal Planning Board meeting.

This year city construction starts have been mostly for small projects. About half the fees the city has missed out on would have come from new residences, including 160 homes and 1,500 apartments and condominiums that have been started since January. The remaining fees would have come from small commercial, industrial and office projects, mostly under 30,000 square feet.

Orlando Mayor Bill Frederick, apparently surprised to learn that the city had lost out on $2 million, said he had been assured by staff that there were ''no projects slipping through the net'' as a result of the timetable.

''That's a lot of money. But I want it to fit downtown,'' he said. ''I'd rather lose some money than make a mistake that will stop the inner city in its tracks.''

Frederick blames the delays on downtown, which he calls ''a unique situation'' that needs special consideration in the fee structure.

Because Orlando is competing against other cities that offer ''enormous breaks'' to major developers, it's important that the impact fee ''be sensitive and correct'' to the special circumstances of the main business area, he said.

''Doing it right is as important, at this point, as getting the revenue,'' said Frederick, who has made downtown development one of his top priorities.

Planning and Development Director Rick Bernhardt said the proposed fee would be presented to the Municipal Planning Board in July, and should be adopted by mid-August.

The fee was delayed, he said, because it took time to study how to accurately measure traffic downtown and what to do to avoid discouraging development of low-cost housing.

The final proposal probably would include a discount of 5 percent to 15 percent for retail downtown, and perhaps also in other major activity centers where intense development is allowed, he said.

Legitimate low-income housing projects would be exempt from all fees, he said.

''We want an impact fee that will work and be right,'' Bernhardt said. ''We're going as fast as we can. As fast as we think is appropriate.''

As for the downtown projects, he said, ''we're not delaying it to accommodate them . . . It hasn't rained since we delayed it either,'' but that's not the reason for the drought, he said.

Frederick talked to him about timing and also making sure ''we weren't at a competitive advantage or disadvantage with the county,'' Bernhardt said.

City transportation planner Dick Thomas said it makes sense to charge a lower fee for downtown and other activity centers.

''It is generally recognized that high intensity areas such as the central business district have different trip generation rates than suburban areas,'' said Thomas, citing the increased use of mass transit and greater likelihood of people walking.

Determining just how much the downtown should pay is difficult because few thorough studies have been done on the subject, Thomas said.

He is preparing a draft of the impact fee ordinance that will be reviewed by staff and a 23-member study committee before it goes to the planning board in July.

Council member Mable Butler said she was surprised to learn of the amount of missed money.